While most public cryptocurrency miners are bracing themselves for the supply shock of Bitcoin’s halving, JPMorgan has listed its preferred miners. “With the Bitcoin halving on the horizon, we expect increased volatility and trading volume for both Bitcoin and mining stocks,” JPMorgan analyst Reginald Smith said in a report this week. “That said, We believe the recent weakness provides an attractive entry point and are particularly bullish on RIOT and IREN, which we believe offer attractive relative valuations.” The Bitcoin halving is expected to occur in the coming days. Companies are preparing for a reduction in reward revenue following the halving event. Many publicly traded miners have been preparing for this, making large purchases of new mining equipment or increasing power capacity and hash power. However, uncertainty ahead of the halving has weighed on mining stocks, most of which have suffered double-digit losses this year. Smith noted that Riot Platforms is the worst-performing stock in JPMorgan’s mining coverage universe, but noted that it, along with CleanSpark, is poised to show the largest hash rate growth due to new and acquired facilities. JPMorgan Chase & Co. has an overweight rating on Riot and Iris Energy. It has a CleanSpark neutral rating. Hash rate is a measure of the computing power used to process transactions on the Bitcoin network. The greater the hashrate of a miner, the greater the income opportunity. According to JPMorgan estimates, Riot had a hash rate of 12.2 EH/s (or exahashes per second) in the fourth quarter and could end the year at 28.4 EH/s. Iris Energy started at 5.6 EH/s in the fourth quarter and will end the year at 16.4 EH/s. Smith also highlighted Riot’s low electricity costs, noting that electricity is the mining company’s largest single operating expense. “RIOT has the lowest electricity cost per coin mined in 2023 (~$7,500) due to its attractive power purchase agreement, while MARA has the highest electricity cost per coin mined due to escrow fees ( about $17,400),” he said. “We expect CLSK and RIOT to be the two lowest-cost producers after the halving, given their scale and attractive power contracts.” Smith gave CleanSpark the honor despite JPMorgan giving it a neutral rating Award, calling it a “great halving play” due to its “relatively efficient fleet, low total mining costs and favorable hashrate comparisons, which should drive record revenue” and post-halving profit. ” Unlike other mining stocks, CleanSpark shares are up more than 50%. Even on Thursday, the stock price was up about 13%. According to the Bitcoin blockchain code, when the incentive for Bitcoin miners will be from 6.25 new creation The halving occurs when the number of Bitcoins decreases to 3.125 newly created Bitcoins (about $20,000 at Thursday morning’s prices). It is scheduled to occur every 210,000 blocks, approximately every four years – CNBC. Michael Bloom contributed reporting.
